HMV Group delivered an 11.5 per cent rise in pre-tax profit to £63m in its full year results.
For the year to April 25, HMV UK & Ireland like-for-like sales were up 1.9 per cent, and Waterstone’s like-for-like sales were down 3.8 per cent. HMV International like-for-like sales were down 3.4 per cent. Total group sales were up 4.4 per cent.
The group said that the performance of HMV International and Waterstone’s was more adversely affected by weak trading conditions, and key initiatives are underway to improve the operating effectiveness and financial performance of these businesses.
The group has delivered annual savings of £16m from initiatives set out in March 2007 including the Waterstone’s book hub, which simplifies supply chain. Also, in HMV UK & Ireland, it opened a centralised distribution centre.
The retailer said the UK music market was more resilient than expected, with volume decline of approximately 3 per cent last year, and it said HMV UK & Ireland outperformed the market with unit sales up 5 per cent. Music is 28 per cent of sales, down from 30 per cent in the year before.
HMV’s next-generation store format has been rolled out to 15 shops in the UK. Several key features were also rolled out to existing shops as “quick wins”. It also opened its first cinema store in Wimbledon, and said further cinemas may follow.
It also launched an MP3 music downloads offer via hmv.com and has entered into the live music arena with a partnership with Mean Fiddler Group.
At Waterstone’s, the group has entered into the ebooks arena with the exclusive launch of the Sony Reader, and downloadable sales of ebooks from waterstones.com.
Chief executive Simon Fox said: “At the end of the second year of our three-year transformation plan the group has delivered further profit growth, despite the challenging retail environment. We are continuing to adapt to meet the changes in our markets and, whilst there is still much to do, our plans for the third year of our programme are on track.”